German steel producer Thyssen Krupp – Germany’s largest steelmaker by output – has set cats among pigeons where steel pricing is concerned following rumours that the company is on the verge of selling its unprofitable Steel Americas business comprising a steel plant in Calvert, Alabama, USA, and a slab facility in Brazil.
Thyssen Krupp has been looking to exit its US steel operations for some time, but wants to maintain a 73% stake in its Brazilian steel plant of which Vale SA holds a 27% stake.
The likely buyers of the Brazilian slab facility and the Calvert, Alabama steel plant are ArcelorMittal, Nippon Steel & Sumitomo Metals and US Steel, but news of a potential deal has prompted worries over pricing, particularly for Thyssen customers with outstanding orders.
It is argued that the new owners of Thyssen’s American plants is likely to implement stricter pricing strategies and reduce the company’s current discount level, a move that could shake up the entire market, according to news reports.
ArcelorMittal, Nippon Steel & Sumitomo Metal Corp and US Steel have made of bid of around $2 billion for the Calvert facility. Arcelor Mittal has described the plant as a world-class asset.
Thyssen Krupp reported Q3 losses of EUR383 million compared to profits of EUR87 million for the same period last year.
The Calvert, Alabama, facility along with the slab plant in Brazil has already lost Thyssen a cool $15.7 million. Quarterly revenues declined to EUR9.5 million from EUR10.36 billion last year. A decline in full year sales is expected, but Q4 sales figures are likely to
Changes have been made recently to Essen-based Thyssen Krupp AG’s supervisory board. René Obermann, chief executive of Deutsche Telekom AG has joined the board following the resignation of Beatrice Weder di Mauro yesterday, an economist, who has accepted a post with the European Union.